There's nothing like a bull market to lull investors into thinking all is right within the financial world, their personal fortunes and choice of professional money managers. So sweet is the feel of growing assets in one's portfolio that many tend to overlook how their money is being made -- just as long as it is being made.

But enter an extended down market, a few hedge fund blow-ups and a financial scandal of epic proportion and all that was once rosy suddenly turns rusty. And ugly.

Fingers point in every direction for the losses -- at wealth managers, at the investment products and the salespeople hawking them, at the SEC and the government for not preventing the losses. But point your index finger at someone else and your thumb points back at you -- which, in the end, is where financial responsibility always lies.

Transparency

The hottest word in the world of wealth management these days is transparency. As with its cousin disclosure, that is nothing new. What might be new is that perhaps twice-burned investors will begin to ask their wealth managers the hard questions, read the appropriate literature and educate themselves to the risks involved in their investment choices and how each might perform in both good and bad markets.

"Transparency is not just a buzzword, it's something that our study and several others that we've looked at have already flagged as critical," said C. Steven Crosby, U.S. leader of the Private Banking & Wealth Management Group of PriceWaterhouseCoopers.

Since the early 1990s, PwC has published a Private Banking and Wealth Management Survey every two years. Data in the 2009 survey came from 238 wealth managers in 40 countries. The point that stood out the most from the results was that transparency was, "the new gold stand in terms of products and client servicing."

But what, really, is transparency?

"It really means how you communicate with your client, the frequency, the detail, the granularity," Crosby said. "How you talk to them and not just about the performance but where their assets are being managed and who are the counter parties involved."

Based upon PwC's research, high-net-worth individuals now more than ever want to know what their wealth managers are doing to safeguard and protect their money.

Louis Vilardo, vice president of wealth management at Neuberger Berman in Palm Beach, agrees. "Going forward, people are going to rightfully demand fuller disclosure and better transparency so that they can see exactly what their mangers are doing," he said.

Although disclosure and transparency might appear similar, there are differences. "Disclosure, simply put, is saying these are the kinds of things we do and these are the strategies we employ," Vilardo said. "Whereas transparency, at its purest sense, lets you see through the strategy and look at the underlying trades."

That's where the rub is. Invest in, say, some alternatives and you'll get disclosure but not necessarily transparency. Or, hedge fund managers might be willing to disclose information but not all the technicalities of the special sauce that makes their investment strategies unique.

So while the transparency concept is appealing, the information you get could be incomplete, irrelevant and impossible to understand.

What to ask

What's the best you can do to keep abreast of the rapidly changing investing world and ensure that, at the very least, you have a sense of how your money is being managed?

Ask questions -- and keep asking until you get answers that you understand.

"If you're concerned about fraud, you want to know who your prime broker is and who the firm's auditor and its custodian are. ... [Bernard] Madoff was his own custodian, and he was doing his own trading so you had no third-party that you could confirm anything with," Vilardo said.

With regard to hedge fund investing, he said some managers will show you their trades -- but not in real time. "Hedge funds are never going to be as transparent as a managed long- or short-equity account but they should at least be able to show you their trades."

Crosby recommended investors ask the same kind of questions of the firm they are working with as those they'd ask if they were buying a business.

"A wealthy investor should ask questions like: How do you run your business, can I see your audited financial statements, who is your custodian and what kinds of controls and safeguards do you have in place?"

But even after all the questions are asked, all the statements and reports are understood and read, money management comes down to trust. While some may say that's in short supply today, the best way to regain and rebuild it may be for you to take the first step: Pay attention.

"You have to pay attention because there is no free lunch," Crosby said. "We tell our kids to be careful. Why would we not tell our parents and grandparents to be careful with their fortunes?"